US natgas prices fall 3% to one-month low on output rise, lower demand forecast
By Scott DiSavino
July 1 (Reuters) -U.S. natural gas futures fell about 3% to a one-month low on rising output in recent weeks, forecasts for less demand over the next two weeks than previously expected and an ongoing oversupply of gas in storage.
Analysts forecast there was still about 19% more gas in storage than usual for this time of year even though output reductions earlier in 2024 kept weekly injections below normal over the past seven weeks. EIA/GAS NGAS/POLL
That price decline came even though the heat wave blanketing much of the country for weeks will linger through at least mid-July, forcing power generators to continue burning lots of gas to keep air conditioners humming.
Front-month gas futures NGc1 for August delivery on the New York Mercantile Exchange fell 6.5 cents, or 2.5%, to $2.536 per million British thermal units (mmBtu) at 10:17 a.m. EDT (1417 GMT), putting the contract on track for its lowest close since May 29.
Even though gas prices gained about 4% last week, speculators cut their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the first time in three weeks, according to the U.S. Commodity Futures Trading Commission's Commitments of Traders report.
In Texas, the Electric Reliability Council of Texas (ERCOT), the power grid operator for most of the state, said peak demand came close but did not break the record for the month of June last week, as had been expected.
ERCOT, however, projects demand will break the July record on Tuesday as homes and businesses crank up their air conditioners to escape the heat blanketing the state.
In the Caribbean Sea, Hurricane Beryl was an extremely dangerous major hurricane expected to hit Jamaica on Wednesday and the Yucatan Peninsula in Mexico on Friday before entering the Bay of Campeche in the Gulf of Mexico between Yucatan and the east coast of Mexico on Saturday.
SUPPLY AND DEMAND
Financial firm LSEG said gas output in the Lower 48 U.S. states rose to an average of 98.8 billion cubic feet per day (bcfd) in June, up from a 25-month low of 98.1 bcfd in May. That compares with a monthly record high of 105.5 bcfd in December 2023.
Meteorologists projected weather across the Lower 48 states would remain hotter than normal through at least July 16.
With hotter weather expected next week, LSEG forecast average gas demand in the Lower 48, including exports, will rise from 99.8 bcfd this week to 105.8 bcfd next week. Those forecasts were lower than LSEG's outlook on Friday.
Gas flows to the seven big U.S. LNG export plants eased to 12.8 bcfd in June, down from 12.9 bcfd in May and a monthly record high of 14.7 bcfd in December 2023.
That decline was due to plant and pipeline maintenance at several facilities, including Freeport LNG and Cheniere Energy's LNG.N Corpus Christi in Texas and Cameron LNG, Cheniere's Sabine Pass and Venture Global's Calcasieu Pass in Louisiana.
Week ended June 28 Forecast | Week ended June 21 Actual | Year ago June 28 | Five-year average June 28 | ||
U.S. weekly natgas storage change (bcf): | +41 | +52 | +76 | +69 | |
U.S. total natgas in storage (bcf): | 3,138 | 3,097 | 2,859 | 2,638 | |
U.S. total storage versus 5-year average | 19.0% | 20.6% | |||
Global Gas Benchmark Futures ($ per mmBtu) | Current Day | Prior Day | This Month Last Year | Prior Year Average 2023 | Five-Year Average (2018-2022) |
Henry Hub NGc1 | 2.56 | 2.60 | 2.64 | 2.66 | 3.60 |
Title Transfer Facility (TTF) TRNLTTFMc1 | 10.73 | 10.71 | 9.58 | 13.04 | 14.39 |
Japan Korea Marker (JKM) JKMc1 | 12.64 | 12.66 | 11.44 | 14.39 | 14.31 |
LSEG Heating (HDD), Cooling (CDD) and Total (TDD) Degree Days | |||||
Two-Week Total Forecast | Current Day | Prior Day | Prior Year | 10-Year Norm | 30-Year Norm |
U.S. GFS HDDs | 2 | 4 | 8 | 8 | 5 |
U.S. GFS CDDs | 256 | 249 | 168 | 175 | 196 |
U.S. GFS TDDs | 258 | 253 | 176 | 183 | 201 |
LSEG U.S. Weekly GFS Supply and Demand Forecasts | |||||
Prior Week | Current Week | Next Week | This Week Last Year | Five-Year (2019-2023) Average For Month | |
U.S. Supply (bcfd) | |||||
U.S. Lower 48 Dry Production | 99.6 | 99.0 | 100.1 | 103.3 | 95.5 |
U.S. Imports from Canada | 7.8 | 7.7 | 7.2 | N/A | 7.8 |
U.S. LNG Imports | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
Total U.S. Supply | 107.5 | 107.6 | 107.3 | N/A | 112.5 |
U.S. Demand (bcfd) | |||||
U.S. Exports to Canada | 1.8 | 1.8 | 1.7 | N/A | 2.3 |
U.S. Exports to Mexico | 6.7 | 6.7 | 6.9 | N/A | 6.1 |
U.S. LNG Exports | 12.3 | 12.8 | 13.0 | 13.0 | 8.6 |
U.S. Commercial | 4.4 | 4.3 | 4.3 | 4.3 | 4.5 |
U.S. Residential | 3.7 | 3.5 | 3.5 | 3.4 | 3.6 |
U.S. Power Plant | 45.3 | 42.1 | 47.5 | 44.9 | 43.3 |
U.S. Industrial | 21.7 | 21.6 | 21.7 | 21.2 | 21.3 |
U.S. Plant Fuel | 4.9 | 4.9 | 4.9 | 4.9 | 4.9 |
U.S. Pipe Distribution | 2.2 | 2.1 | 2.2 | 2.2 | 2.2 |
U.S. Vehicle Fuel | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
Total U.S. Consumption | 82.3 | 78.6 | 84.3 | 81.0 | 79.9 |
Total U.S. Demand | 103.1 | 99.8 | 105.8 | N/A | 96.9 |
N/A is Not Available | |||||
U.S. Northwest River Forecast Center (NWRFC) at The Dalles Dam | Current Day % of Normal Forecast | Prior Day % of Normal Forecast | 2023 % of Normal Actual | 2022 % of Normal Actual | 2021 % of Normal Actual |
Apr-Sep | 75 | 75 | 83 | 107 | 81 |
Jan-Jul | 76 | 76 | 77 | 102 | 79 |
Oct-Sep | 78 | 78 | 76 | 103 | 81 |
U.S. weekly power generation percent by fuel - EIA | |||||
Week ended Jul 5 | Week ended Jun 28 | Week ended Jun 21 | Week ended Jun 14 | Week ended Jun 7 | |
Wind | 11 | 9 | 12 | 9 | 11 |
Solar | 6 | 5 | 6 | 6 | 6 |
Hydro | 5 | 5 | 6 | 7 | 7 |
Other | 1 | 1 | 1 | 1 | 1 |
Petroleum | 0 | 0 | 0 | 0 | 0 |
Natural Gas | 41 | 43 | 40 | 41 | 41 |
Coal | 18 | 19 | 18 | 16 | 15 |
Nuclear | 18 | 17 | 17 | 19 | 19 |
SNL U.S. Natural Gas Next-Day Prices ($ per mmBtu) | |||||
Hub | Current Day | Prior Day | |||
Henry Hub NG-W-HH-SNL | 2.42 | 2.55 | |||
Transco Z6 New York NG-CG-NY-SNL | 1.46 | 1.55 | |||
PG&E Citygate NG-CG-PGE-SNL | 3.15 | 2.96 | |||
Eastern Gas (old Dominion South) NG-PCN-APP-SNL | 1.40 | 1.61 | |||
Chicago Citygate NG-CG-CH-SNL | 1.91 | 1.98 | |||
Algonquin Citygate NG-CG-BS-SNL | 1.52 | 1.88 | |||
SoCal Citygate NG-SCL-CGT-SNL | 2.38 | 2.05 | |||
Waha Hub NG-WAH-WTX-SNL | 2.25 | -2.78 | |||
AECO NG-ASH-ALB-SNL | 0.51 | 0.50 | |||
SNL U.S. Power Next-Day Prices ($ per megawatt-hour) | |||||
Hub | Current Day | Prior Day | |||
New England EL-PK-NPMS-SNL | 28.50 | 29.75 | |||
PJM West EL-PK-PJMW-SNL | 38.25 | 32.25 | |||
Ercot North EL-PK-ERTN-SNL | 33.25 | 25.75 | |||
Mid C EL-PK-MIDC-SNL | 39.21 | 49.00 | |||
Palo Verde EL-PK-PLVD-SNL | 30.25 | 33.50 | |||
SP-15 EL-PK-SP15-SNL | 29.50 | 34.00 |
Reporting by Scott DiSavino; editing by Jonathan Oatis
For gas data on LSEG's Eikon type ENERGY in the search bar and then go to the GAS drop down and the NORTH AMERICA drop down.
For Interactive Map, type 'Interactive Map' in the box at upper left of the Eikon terminal
For graphics on Baker Hughes rig counts, see: http://graphics.thomsonreuters.com/15/rigcount/index.html
For next-day SNL U.S. gas prices, see: 0#SNL-NG
For next-day SNL U.S. power prices, see: 0#SNL-PWR
For U.S. natgas price and storage polls, see: NGAS/POLL
For U.S. nuclear power outages, see: NUKE/
For U.S. Northwest hydro power report, see: NWRFC
For U.S./Canada natural gas rig count vs Henry Hub futures price, see: http://tmsnrt.rs/2eT9k44
For the U.S. natural gas speed guide, see: USGAS
For the U.S. power speed guide, see: USPOWER
To determine CFTC managed money net position add (NYMEX Henry Hub options and futures combined 3023651MNET) plus (ICE Henry Hub options and futures combined 3023391MNET divided by four) plus (NYMEX Henry Hub swaps options and futures combined 303565BMNET divided by four) plus (NYMEX Henry Hub penultimate gas swaps 303565CMNET divided by four)
NYMEX Henry Hub options and futures combined 0#3CFTC023651
NYMEX Henry Hub futures only 0#1CFTC023651
ICE Henry Hub options and futures combined 0#3CFTC023391
NYMEX Henry Hub swaps options and futures combined 0#3CFTC03565B
NYMEX Henry Hub Penultimate gas swaps 0#3CFTC03565C
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